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May


A prescription for success: Forget off-the-shelf remedies and think for yourself

Sun, 9th Jan 2005

A READER grumpily greets the new year by noting that a century of management research doesn't seem to have fundamentally got us any further forward. Organisations, whether in the public or private sector, are just as poor at providing consistent service and value as they ever were.

This, alas, is pretty much the truth. But it's actually worse than that. The ineffectiveness is self-inflicted. Most companies are badly run not because there's too little management but because there's too much doing the wrong things. One academic, tongue only partly in cheek, suggests that one of the reasons for Britain's notorious productivity gap is the large number of managers self-importantly making non-productive work for one another- one person to do the job and another two to check the job is done. The wood is lost among the trees. So here, in the spirit of a fresh beginning, are some new year resolutions for management.

Stop 'managing' and start doing

Management has no sense or meaning in the abstract. Its only value lies in getting the job done: no more, no less. The job is something of value to a customer. A priori , any activity that doesn't contribute directly to delivering value to a customer, or improving it, should be kept to a minimum or, better, abandoned.

A surprising number of standard management practices fall into this category. Budgeting, for instance. Or appraisal. Or the ceaseless round of standard- and target-setting and controlling outcomes that passes for 'management' in most companies and also, unfortunately, in the public sector. Managers should spend most of their time 'doing': working with people on the front line to understand customers and satisfy their needs better.

Concentrate on operations,

not financial figures

The financials are the scoreline, the result of how well you are playing, not something to manage by. If you do the things you need to do to please your customers, and only those things, the financials will look after themselves. What's more, since most companies are so poor at operations, operational excellence becomes a highly viable - perhaps the best - competitive ploy.

Managers don't need to spend time and energy devising complicated and detailed strategies. Just do more of what you're good at. Look at Dell. If it can make money making computers, it can also very likely make money turning out TVs, digital jukeboxes and handhelds, which is precisely what it is doing. It is its operational excellence that makes it look a brilliant strategy.

Think small

The challenge is not doing large, but the opposite. Today's management is much like today's software: bloated, full of features that no one wants, and full of bugs. As with software, manufacturing and service, management needs to go lean, stripping out waste and increasing its capacity for productive contribution.

Keep it simple

Why are we doing this? Peter Drucker once said that every few years a company should question the rationale for every one of its processes and their underlying assumptions. Complication should be taken as a warning sign of probable waste, as complexity feeds on itself. Note that simple doesn't necessarily mean easy. Judgment is still needed, but it's easier to distinguish the wood from the trees when unnecessary complication is removed.

Think 'pull' and 'flow'

The principles behind simplicity are 'pull' and 'flow'. The starting point is customer demand, triggering an order, which pulls delivery of a product or service from the organisation. The smoother the flow of products or services through the system, the less wasted effort and the more efficient it will be. Improving the flow is the manager's job, and pull tells him or her how to do it. Should you do more training? Probably. What kind? Whatever is needed to enable people to improve the flow of work through the system.

Think for yourself

Just because competitors are outsourcing and offshoring doesn't mean you should. The same goes for 'improvements' that are nearer home. Off-the-shelf tools, processes, formulas and acronyms are a bit like patent medicines: of doubtful utility used singly, and potentially dangerous in combination.

It's not just that context is important (although it is). Quite often, different tools and techniques contradict each other, or the overall system in which they are being implanted. You wouldn't expect to marry bicycle parts with those of a car or computer: all too often that is what managers in effect attempt to do, with the predictable consequence of making systems less stable and harder to manage than they were before . From quality circles on, the technique or tool is often less important than the thinking behind it mistaking the one for the other is one reason why 'change programmes' so often fail to live up to ambitious expectations.

IT - just say no

The most seductive tool of all is computers. Of course, computers are important and necessary in many applications (not least the one in which these words are written). But they are not 'solutions'. A computer is a tool, like a hammer, and the only strategy a company needs for it is to use where appropriate. It's a racing certainty that 2005 will see a new crop of IT failures as buyer credulity combines with vendor overselling to create ambitions that are simply unsustainable. Make it the year that hope is finally trumped by experience - and a happy one at that.

The Observer, 9 January 2005


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